Poor Ethiopian farmers receive 'unprecedented' insurance payout

Dec 12, 2012 by Francesco Fiondella
Poor Ethiopian farmers receive 'unprecedented' insurance payout
A farmer signs his name indicating he received compensation for participating in games run by IRI and REST to determine how farmers perceive economic risk and value compensation from insurance at different timescales. Credit: Brian Kahn/IRI

Last week, Oxfam America and the Rockefeller Foundation announced a weather index insurance payout of unprecedented scale directly to poor farmers. Thanks to a groundbreaking new program that relies on advanced satellite technology, more than 12,200 farmers in 45 villages in Northern Ethiopia will benefit from drought protection. As a result of this year's drought conditions each farmer will receive a share of the total $322,772 in payouts offered through the Horn of Africa Risk Transfer for Adaption Program, known as HARITA, to help cover crop losses.

In many rural areas, disaster often strikes poor hard, forcing them to make choices that drag their families deeper into poverty. To survive, they might have to sell their tools for cash to buy food, or take their children out of school to save on fees. With weather insurance, farmers can protect the investment they make in their crops, and feel confident in taking out loans for fertilizer and better seeds to improve their harvests.

"We used to be blocked because it was too expensive, if not impossible, to get drought and crop loss data in time to help the farmers," said Dan Osgood, an economist at the International Research Institute for Climate and Society, who leads a team that helped design the insurance contracts for the farmers. "This payout was triggered by rainfall estimates measured by the same cutting-edge used by NASA and , but engineered together with Ethiopians to target their risks and vulnerabilities. This allowed us to calculate the payouts just as crops were beginning to suffer, so farmers will get the money when they need it most," he said.

Oxfam, with funding from the Rockefeller Foundation, partnered with Swiss Re, the International Research Institute for Climate and Society, the Relief Society of Tigray, Dedebit Credit and Savings Institution, Nyala Insurance Company and Africa Company to start HARITA in 2007. Last year, the United Nations World Food Program, supported by United States Agency for International Development and Oxfam expanded HARITA, now known as the R4 Rural Resilience Initiative, to help poor farmers protect their crops and livelihoods from the impacts of climate variability and change, including drought.

Visit the Oxfam website for more details on the program and the historic payout.

Explore further: Book offers simplified guide to shale gas extraction

add to favorites email to friend print save as pdf

Related Stories

Amid drought, US opens up land for grazing, haying

Jul 23, 2012

The Obama administration opened up protected US land to help farmers and ranchers hit by severe drought Monday, and encouraged crop insurance companies to forgo charging interest for a month.

Recommended for you

Book offers simplified guide to shale gas extraction

12 minutes ago

The new book, "Science Beneath the Surface: A Very Short Guide to the Marcellus Shale," attempts to offer a reader-friendly, unbiased, scientific guide needed to make well-informed decisions regarding energy ...

New approach needed to deal with increased flood risk

31 minutes ago

Considering the impacts of climate change on flood risk may not be effective unless current risk is managed better, according to new research from the University of Bristol published today in the Journal ...

Researchers question emergency water treatment guidelines

19 hours ago

The Environmental Protection Agency's (EPA's) recommendations for treating water after a natural disaster or other emergencies call for more chlorine bleach than is necessary to kill disease-causing pathogens ...

User comments : 2

Adjust slider to filter visible comments by rank

Display comments: newest first

vlaaing peerd
5 / 5 (2) Dec 12, 2012
Wow!!! How generous, $26,- per farmer. How about we pay a little more for our food so the good years will help them cover for the bad ones?
Jotaf
1 / 5 (1) Dec 12, 2012
If it's anything like in my country, the big food chains will take the largest share of the profits, and pay a few cents per KG to the farmers. When they complain, the answer is always the same: "take it or leave it". Yay free market -- getting the money to where it's not needed.

More news stories

Melting during cooling period

(Phys.org) —A University of Maine research team says stratification of the North Atlantic Ocean contributed to summer warming and glacial melting in Scotland during the period recognized for abrupt cooling ...

Robotics goes micro-scale

(Phys.org) —The development of light-driven 'micro-robots' that can autonomously investigate and manipulate the nano-scale environment in a microscope comes a step closer, thanks to new research from the ...

Biologists help solve fungi mysteries

(Phys.org) —A new genetic analysis revealing the previously unknown biodiversity and distribution of thousands of fungi in North America might also reveal a previously underappreciated contributor to climate ...